SAMSUNG ELECTRO-MECHANICS

◇ Revenue of KRW 2.4755 trillion and operating profit of KRW 339.3 billion
  - 41% increase in revenue and 230% increase in operating profit, compared to the same period last year; 4% increase in revenue and 2% increase in operating profit compared to the previous quarter
   · Revenue and profitability improved by expanding high value-added products such as small/high-capacity IT and industrial/automotive MLCCs and high-spec semiconductor package substrates
 
◇ In the second half of the year, there are concerns about increasing market volatility and uncertainty; component market demand is expected to continue to increase
  - To actively respond to market demand by expanding the supply of high value-added products, such as high value-added MLCCs for IT and automobiles, and high-spec semiconductor package substrates
  - To expand the supply of high-performance cameras for flagship phones and camera modules for high-spec models among budget smartphones

Samsung Electro-Mechanics announced on July 28 that it posted revenue of KRW 2.4755 trillion and operating profit of KRW 339.3 billion on a consolidated basis in the second quarter of 2021.
This marks YoY increases of KRW 715.4 billion (41%) in revenue and KRW 236.6 billion (230%) in operating profit, and QoQ increases of KRW 103.5 billion (4%) in revenue and KRW 7.8 billion (2%) in operating profit.
 
The company explained that its earnings improved significantly compared to the same period last year thanks to increased sales of high value-added products, such as small/high-capacity MLCCs for IT, industrial/automotive MLCCs, and high-spec semiconductor package substrates.
 
In the second half of the year, there are concerns about increased market volatility, such as the prolonged pandemic, and uncertainties related to some set market conditions, but demand for related parts is expected to continue to increase as major smartphone makers plan to launch flagship models and automobile demand is projected to recover.
Samsung Electro-Mechanics plans to actively respond to market demand by continuously expanding the supply of high value-added products such as high value-added MLCCs for IT and automobiles and high-spec semiconductor package substrates, and to expand the supply of camera module products for high-performance cameras for flagship phones and high-spec models among budget smartphones.

□ Earnings and Forecast by Business Unit
 
In Q2, the component business achieved revenue of KRW 1.1952 trillion, up 42% YoY and 10% QoQ, thanks to the increased supply of small and ultra-high-capacity products for IT and high value-added industrial and automotive MLCCs.
In the second half of the year, as IT-related demand such as mobile devices, PCs, TVs, and game consoles is expected to continue, we plan to increase the supply of high value-added products like small and ultra-high-capacity products.
In addition, the demand for automotive MLCCs is forecast to rise on the back of the recovery of automobile demand and the continued trend of going electric.
Samsung Electro-Mechanics will respond to market demand in a timely manner by expanding our automotive product lineup and increasing production capacity.
 
In Q2, the module business recorded revenue of KRW 813.7 billion, which is up 47% YoY but down 3% QoQ.
Revenue declined QoQ due to a decrease in camera module supply to strategic partners during the off-season but increased YoY thanks to the increased supply of multi-camera, folded zoom and high-pixel OIS camera modules to Chinese partners.
In the second half, camera module demand is expected to recover thanks to the launch of new flagship smartphones by major domestic and foreign partners, but uncertainties in demand in the Chinese market are expected to remain, including changes in set production plans due to the semiconductor supply issue.
Samsung Electro-Mechanics plans to gain an edge in the flagship market with high-performance camera modules for new smartphones and continue to expand the supply of camera module products for high-spec models among budget smartphones.
 
The circuit board business posted revenue of KRW 466.6 billion, up 27% YoY and 6% QoQ.
Semiconductor package substrates are in full production on the back of a continued increase in the supply of BGA for high-spec AP and high value-added SSD memory and PC CPU FCBGA, and earnings improved thanks to an increase in the proportion of high value-added products.
Demand for high-spec package substrates such as APs, 5G antennas, and thin-plate CPUs is forecast to continue in the second half of the year.
Samsung Electro-Mechanics will increase profitability by expanding the proportion of high value-added products and strengthen competitiveness with differentiated technologies, such as built-in parts and microcircuits.
 
[Earnings by Quarter]

(Unit: KRW 100M)

[Revenue by Business Unit]
(Unit: KRW 100M)